A stock is not a piece of paper. It's a piece of a company which, if you buy the right ones, produces goods or services and generates revenue. Yes, the market will unquestionably fall someday, and stocks in companies like Merck will lose some of their value. The companies are still going to be there, though, and the value will return. Remember "black monday" in '87? On a long-term chart it looks like a wrinkle. Last October's slump left people without their pants,as you said. But those who did the smart thing and held had their pants back on within days.
I don't own Merck, I do own some WLA, which has done pretty well for me. With the entire baby boom generation, most of it well insured and reasonably prosperous, entering the demographic group which consumes the largest quantity of pharmaceuticals, do you really see these companies vanishing from the face of the earth? Do you think Dell, Lucent, IBM will disappear? That people will stop communicating, stop buying computers? Temporary slump, yes. Permanent collapse, I doubt it.
You used the word "Armageddon", I didn't. Most of us take that to mean total collapse of the entire political, social, and economic edifice. And yes, in that event, your gold will be as useless as my stock. For one thing, you won't even have it, unless you keep physical possession of the metal yourself. If you have a piece of paper which says you own X amount of gold in a vault somewhere, what good will that do you when the apocalypse that you so gleefully anticipate actually arrives - if it does?
As an investor, I try to accumulate holdings in entities that generate consistently increasing revenues. That's how I define intrinsic value, and gold hasn't got it. Values will fluctuate, but I don't have the patience to juggle investments with each fluctuation. The quality companies will bounce back.
I like owning a little bit of active, dynamic, companies. I like opening up the computer every morning and finding out what these companies are doing - not just what the stock is worth. The thought of buying something that sits in a vault and only increases in value when everything else falls apart bores the hell out of me.
Can we get back to Asia?
Steve |
